UK businesses ‘need to do more to increase return on investment’

Posted 26/07/2010

UK businesses are not doing enough to ensure they maximise profits from their investment in people, it has been claimed.

A new Trends in Human Capital report from PricewaterhouseCoopers (PwC) showed that companies in Britain may be lagging behind their counterparts in the US when it comes to the human capital return on investment (HC ROI).

The data showed that from 2002 to 2006, HC ROI increased by 19.8 per cent in the US, compared to 4.6 per cent in the UK.

Even after the global economy began to decline, HC ROI held steady in the US but fell by 2.8 per cent in Britain.

PwC spokesperson Richard Phelps said companies across the Atlantic have proven to be better at altering their employment costs to adapt to the changing markets.

‘Firms here will need to find other ways to improve staff returns to compete globally with their more aggressive competitors,’ he added.

In May 2010, Business in the Community told Personnel Today that firms which take steps to improve health and wellbeing among their employees could improve financial performance by up to 10 per cent.